Are syndicated loans truly less expensive?

Janko Hernández Cortés, Josep A Tribó and María de las Adamuz

Journal of Banking & Finance, 2020, vol. 120, issue C

Abstract: In this paper, we empirically examine the spreads of syndicated and non-syndicated loans. We compare the spreads from tranches belonging to both types of contracts across deals of similar sizes. Our study of large corporate loans in the US market for the period from 1990 to 2013 shows that the differential between syndicated and non-syndicated spreads is, on average, 19.23 basis points. Moreover, for small and medium loans, the differences are 39.3 and 21.89 basis points, respectively. We use different methodologies and time periods and address endogeneity concerns on the decision of syndication to provide robust empirical evidence that, contrary to some previous studies, syndicated loans are not less expensive than non-syndicated loans and in most cases are significantly more expensive, particularly for small loans.

Keywords: Syndicated loans; Loan spreads (search for similar items in EconPapers)
JEL-codes: G20 G30 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378426620302041
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:120:y:2020:i:c:s0378426620302041

DOI: 10.1016/j.jbankfin.2020.105942

Access Statistics for this article

Journal of Banking & Finance is currently edited by Ike Mathur

More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().